A global think tank has suggested that Amazon should include Bitcoin in its strategic reserve by next year. The National Center for Public Policy Research claims that adding Bitcoin could help Amazon protect its $88 billion in cash and equivalents from inflation. With the U.S. inflation rate peaking at 9.1% in mid-2022, traditional assets like bonds may not safeguard shareholder value effectively. They pointed out that Bitcoin has risen 131% over the past year, outpacing bonds by 126%. The think tank advises Amazon to consider investing at least 5% of its assets in Bitcoin, following the lead of companies like MicroStrategy and Microsoft, which are exploring similar strategies to enhance their financial performance and resilience against inflation.
A global think tank has advised Amazon to consider adding Bitcoin to its strategic reserve by next year. This recommendation echoes a recent suggestion made to Microsoft.
The National Center for Public Policy Research, a conservative think tank based in Washington D.C., has proposed that Amazon, the fifth largest company in the world, should explore the inclusion of Bitcoin, also known as BTC. The suggestion comes as part of a larger strategy to better manage the company’s cash reserves, which currently amount to $88 billion. This sum comprises various assets, such as U.S. government bonds and corporate investments.
The think tank argues that given the current financial climate and rising inflation rates, Amazon may have a responsibility to consider more appreciating assets like Bitcoin. The quote from their report states, “Amazon should – and perhaps has a fiduciary duty to – consider adding an asset to its treasury that appreciates more than bonds, even if those assets are more volatile in the short term.” This perspective emphasizes the need for companies to adapt and protect shareholder value in an uncertain economic environment.
In light of the U.S. inflation rate, which peaked at 9.1% in June 2022, holding traditional bonds is viewed as inadequate for protecting substantial shareholder investments. The National Center points out Bitcoin’s impressive performance over the past year, with a remarkable increase of 131%, outperforming bonds, which only rose by 126%.
MicroStrategy serves as an example, having added Bitcoin to its portfolio in 2020. Since then, their stock has surged by 594%, significantly surpassing Amazon’s stock growth of just 57% over the past year. Additionally, MicroStrategy’s chairman, Michael Saylor, has also promoted Bitcoin reserves for Microsoft, with a potential decision to be made soon.
The prevailing advice from the National Center is for Amazon to diversify its balance sheet by allocating at least 5% of its assets into Bitcoin. This move is not only about staying technologically relevant but also about safeguarding shareholder value against ongoing inflation trends.
By considering this strategic shift, Amazon could position itself alongside other forward-thinking companies adapting to the financial landscape shaped by digital assets.
What is the Bitcoin reserve proposal for Amazon?
A global think tank has suggested that Amazon should hold a reserve of Bitcoin. This idea aims to add flexibility and security to Amazon’s finances, making it easier to handle digital transactions and investments.
Why is Bitcoin considered for Amazon’s reserve?
Bitcoin is popular and widely recognized. It has the potential to increase in value over time. By holding a Bitcoin reserve, Amazon could benefit from its growth and use it for various payments.
How would this impact Amazon customers?
If Amazon adopts a Bitcoin reserve, it could lead to new payment options for customers. Shoppers may be able to use Bitcoin to buy products, making transactions faster and more accessible.
What are the risks involved with holding Bitcoin?
Bitcoin’s value can be very unpredictable. It can go up and down quickly, which means Amazon could lose money if Bitcoin’s value drops. The company would need to manage this risk carefully.
Is this proposal likely to happen?
It’s hard to say for sure. The idea is interesting, and it could bring benefits, but Amazon would need to consider many factors. They must weigh the risks and benefits before making a decision about the Bitcoin reserve.
